KARACHI: Renowned economist Atif Mian likened Pakistan's entire power sector to "Zombie" that is "Sucking blood out of rest of economy".

In post on X, formerly Pakistani-American economist, currently professor of Economics, Public Policy and Finance at Princeton University, detailed how country's power sector fits description of 'zombie firms'-companies that are fundamentally insolvent yet kept alive through external subsidies.  "In simpler words, cost of running these firms far exceeds what these firms can generate as revenue from fair market-yet they are kept alive through artificial life support.

"Zombie firms come straight from horror movie-they stay alive by sucking blood of healthy firms in economy, killing more firms in process," elaborated economist. He emphasised that Pakistan's power sector has burdened economy with high electricity costs while still running at loss."Proof is simple: Pakistan is selling electricity at one of highest prices in world, about 21 cents per kWh (with taxes), and yet sector as whole runs in loss," said Atif. Citing example of neighbouring India, he said true market price of electricity should not be more than 8-9 cents per kWh. "But government is charging an exorbitant price in order to keep zombie alive."In essence, Pakistan's government refuses to recognise that its power sector is bankrupt-itself result of broken nervous system over past three decades. Government is keeping this bankrupt zombie sector alive by passing on its extremely high cost to ordinary citizens. Atif MIan was of view that in an ideal world, these zombie power companies would be declared bankrupt and forced to go through corporate reorganisation, writing down value of bad debt until total value of these power companies reflects their true market value. Economist called for seeking more efficient ways to pay for losses of bad assets, rather than adding them as additional cost per kWh."For example, cut government expenditure, ask provinces to run larger surplus (rather than give away free solar panels which makes zombie problem worse), remove tax subsidies for military and civilian officers on property sales, etc.